MUMBAI India said its economy grew 7.3 percent in the October-December quarter from a year earlier, in line with expectations, and forecast that gross domestic product would expand an annualised 7.6 percent in the fiscal year ending in March.

The latest full-year estimate compares with a revised 7.2 percent growth a year earlier.

COMMENTARY

SAUGATA BHATTACHARYA, CHIEF ECONOMIST, AXIS BANK, MUMBAI

"Initial numbers seem to suggest that growth is stronger than earlier thought, but the GVA number, which is a more important number, is not throwing big surprises as per our estimates.

"Inventory growth has come down to 5.5 percent from 20.3 percent last year. That means there's been a massive drawdown in stock, which means there's still good demand in the economy."

"Overall the gross capital formation is also up from 4.8 percent to 5.3 percent which means even the capex engine has not slowed down, and is growing at a rapid pace."

ABHEEK BARUA, CHIEF ECONOMIST, HDFC BANK, NEW DELHI

"The manufacturing number seems to be a little too strong and is completely disconnected either with IIP (industrial output), which is theoretically possible. But even with the kind of margins and profits which we are looking at in the corporate sector, the GVA number seems to be a little elevated.

"I think the thing that worries me the most is the 8.6 percent nominal number, which seems to again highlight the fact there are, on an economy-wide level, deflationary pressures and complete lack of pricing power. And I suspect it is not entirely coming from commodity price deflation.

"I suspect the advance estimates will be pared down, because otherwise you need around a 7.6 percent kind of number for Q4, which is unlikely to sort of come through.

"There is discomfort, and I think the discomfort is stemming largely from the fact, the GVA number, especially on the manufacturing side, don't seem to correlate with anything at the more micro sort of ground level. And I think that's really what the concerns are.

"Overall, the deflator is looking very, very worrisome and I think it should rekindle the debate on whether we should be completely guided by CPI on monetary policy decision, or whether we should take some kind of an aggregate measure of prices as a guide for monetary policy and other decisions."

RITIKA MANKAR, ECONOMIST, AMBIT CAPITAL

"3QFY16 GDP data could have been lowballed given that this can allow the government to justify fiscal slippage for FY17.

"The new GDP series and the information it is conveying, not just in terms of level but also in terms of the direction, seems counter-intuitive, simply because all our qualitative and quantitative data checks suggest GDP growth decisively decelerated in FY16 vs FY15.

"Our own proprietary tool based on real economy indicators suggests that economic momentum has been decelerating systematically from 1QFY16 to 3QFY16."